Fed Thinks Economy Will Start Recovery This Year

But things won't really turn around for awhile:

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke told Congress Tuesday that the economy should pull out of a recession and start growing again later this year.

But in testimony to Congress' Joint Economic Committee, Bernanke warned that even after a recovery gets under way, economic activity is likely to be subpar. That means businesses will stay cautious about hiring, driving up the nation's unemployment rate and causing "further sizable job losses" in the coming months, he said.

The recession, which started in December 2007, already has snatched a net total of 5.1 million jobs.

The unemployment rate "could remain high for a time, even after economic growth resumes," Bernanke said.

Even with all the cautionary notes, the Fed chief offered a far less dour assessment of the economy.

"We continue to expect economic activity to bottom out, then to turn up later this year," he told lawmakers.

I think it's going to take some time before businesses feel confident about expanding. Given the heavy-handed way Obama has been treating banks and car companies, and the way he's demonized other firms, business leaders aren't going to want to put themselves out there if they think they could draw attention from the White House.